Speculative Trends always go to extremes before they reverse & correct!
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Is the market pricing of oil a scam?
- Thread starter AutoMate
- Start date
Quote from petrotrader:
Your argument is completely false. Traditional energies aren't yet expensive enough for the "alternatives" to become true economic substitutes when you exclude the tax incentives/subsidies. Oh, and those incentives/subsidies are being instituted by the govt, although not because it's economically in the best interest of the American consumer/tax payer but that's neither here nor there.
The "change" won't begin in the US until energy prices are high enough to cause the average American to change their consumption habits i.e. taking public transit, walking, riding a bike, carpooling, driving more fuel efficient vehicles, wearing a sweater in the house instead of cranking up the heat, etc.
Agreed, corn-based ethanol is a less than useful program for us in terms of efficiency, and I don't expect it to last. As far as economics go, coal, nuclear and hydrocarbons are the cheapest things we have to make energy at this point, so until energy as a whole gets expensive enough and stays there, it will be a slow migration toward cleaner technologies. It seems unlikely that people will adapt their consumption behavior for energy until they have to (price), so I suspect that prices will continue higher over time, and that the percentage of income dedicated to energy will increase.
Quote from luckyluciano:
Speculative Trends always go to extremes before they reverse & correct!
This is assuming that the long term bull market in oil is a speculative trend, and not a trend based on real supply and demand based on our growing world and supplies in the ground and production capacities.
Speculators will ride the wave, but we aren't the sole cause of it.
Quote from TradEStar:
You don't get the game..our governments control the laws that will or will not enable new energy facilitation..this is why it is not really happening (just token actions for the "perception" of a change).
That and the fact that there is no current substitute, only bridges at best.
But then again, the soccer mom on the BP commercial is probably the best consultant.
Quote from petrotrader:
WThe US govt has little ability to control oil trading and if they decide to increase regulations, the liquidity will eventually leave the US.
I agree here. How could they control something that is not theirs? The largest oil companies are not in north america, so control over their actions, and all the politics that surround these companies, is very difficult, even impossible.
Quote from AutoMate:
Just throwing this out there as a question(s) of curiosity.
Do you think that the futures market for oil creates an artificial pricing? Is it truly an efficient market place whereby we all benefit by the market pricing mechanism? Or, is it just one big scam cooked up by us capitalists to take money out of the hands of the 'unwashed masses'? If the people who produce the stuff were responsible for pricing it at the point of delivery without a global market pricing mechanism (futures markets), would prices likely be higher, or lower?
I have no opinion one way or another but would like to see what kind of responses a thread like this brings. Traders, scholars, know-it-alls, crackpots, conspiracy theororists, bring it on! I'd like to hear as many different opinions as I can.
Auto
there is a huge speculator premium in oil, combined with a huge terror premium
when will it unwind? no idea....
will it go higher, could easily
Quote from Poole:
there is a huge speculator premium in oil, combined with a huge terror premium
when will it unwind? no idea....
will it go higher, could easily
There's no reason for the premium to ever unwind, it's there for a reason, and these reasons aren't gong away anytime soon.
I would say the odds are that the premium will increase slowly over time.
In my opinion, it's going higher and there's no stopping it. Correction, fine, but then we take out the high.